The Third Reich strongly discouraged marriages and sexual relations with Italians (even during Axis membership)

Some Germanic Fascists generally respected the Italians and saw them as racial equals. Others… not so much.

A look at diplomatic intervention in response to German–Italian ‘mixed marriages’ in 1941 provides an even more concrete impression, as this question left little room for diplomatic ambiguity. A law that would generally ban marriages between German citizens and foreigners was in preparation before the war.

According to notes from the Foreign Office, this measure was justified on the basis of ethnic–political concerns: Such a marriage would weaken ethnic strength, it argued, since through marriage to a foreigner, the wife would lose her [Reich] citizenship and cause the loss of German national heritage.¹⁸

When the war began, [Berlin] ordered the draft law to be postponed until after its conclusion.¹⁹ The reasons for this decision were essentially foreign‐policy related, which means there were diplomatic concerns. The Reich Chancellery had already decided that measures should be taken to prevent Germans from ‘mixing’ with other peoples. Responsibility for this task was delegated to the Reich Security Main Office (RSHA).²⁰

[…]

Reports were accumulating in Italy about the poor treatment of its workers in [the Third Reich]. In early June the industrialist Alberto Pirelli was told that some Italians in Siemensstadt in Berlin were being treated worse than the French labourers, that housing and food left much to be desired, and that there were not enough toilets, lights, telephones or wash facilities.⁵⁸ The Italian workers, who had been promised blissful conditions by the [Reich’s] consuls, were flabbergasted by their accommodations.⁵⁹

The Munich consul also reported that German women had apparently been advised to keep their distance from Italians.⁶⁰ In August 1941, workers began to engage in protests and strikes in [the Reich’s] factories. In the Linz work camp, tumults and serious riots had broken out in reaction to the insufficient food provisions; in the Heinkel Works in Rostock and Arado Aircraft Works in Brandenburg, workers stopped working for the same reason.

The Italian workers also protested against a measure to introduce a badge that would identify them as Italian. They were told that all foreigners in the German factories had to wear a similar identifying marker,⁶¹ but being placed on the same level as all the other ‘foreign workers’ displeased the Italians.

[…]

According to [Fascist] information, relations between German women and Italian workers were subject to severe punishment. In Recklinghausen a woman had had her head shaved and her face smeared with asphalt.⁶³ The Italian consulate general in Dresden added to this report, noting that several workers seen in the company of German women were promptly arrested by the local police. The women received a severe reprimand and were told that they were not to be seen again with the Italians.⁶⁴

Around the same time, a report from the [Fascist] trade union liaison, a man named Cecchi,⁶⁵ caused a stir in Rome. In a letter of 17 September, he reported to the agency in charge of dispatching workers that abuses were taking place in the German Reich: workers were not only being beaten in the camps, they were also threatened by watchdogs that were ordered to attack at the most minor offence.

Men who tried to strike, who remained idle or who simply wanted to return home were sent to concentration camps or prison camps without a trial and without notification of the Italian authorities. According to Italian information, the convicted inmates could serve up to 45 days in the Hallendorf camp. After they were photographed and medically examined, they were given a number, clothed in convict uniforms and made to perform forced labour for 16 hours. According to Cecchi, they were hit with a club or beaten whenever they stopped working.⁶⁶

[…]

The fight over the Cecchi report and Goldbeck memo had a direct impact on the issue of German–Italian ‘mixed marriages’ that had been reintroduced by the RSHA and the Racial Policy Office in July. It was impossible for the Foreign Office to endorse the law initiated by the SS now that the foreign propaganda had made such a big deal over the problems concerning Italian workers.⁸⁴

Moreover, the first objections were being articulated in Italy. Ambassador Alfieri warned in late October that this issue should not leave the impression that ‘legislation and administrative conduct’ were incompatible with ‘the principles of the Axis friendship’.⁸⁵ Although articulated in a convoluted way, it was the first sign that [Rome] was having reservations.

(Emphasis added.)